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  • Gift Aid
    If you give money to charity then you can obtain tax relief if you are a higher rate taxpayer and the donation was made to a registered charity in the EU (plus Norway, Iceland and Liechtenstein). You can also obtain relief for donations made to Community Amateur Sports Clubs (CASCs) that were registered with HMRC… Continue reading Gift Aid
  • Are legal and professional fees tax deductible?
    Fees related to a trade are often allowable but it depends on the nature of the fees. Generally, fees related to the purchase or sale of property/assets and to do with raising equity finance are disallowed for tax purposes. “Capital” expenditure: not deductible Legal and professional fees are “capital” if they relate to an asset’s:… Continue reading Are legal and professional fees tax deductible?
  • Accounting for invoice finance
    How to account for invoice finance? It may sometimes be important to check if the invoice finance is recourse or non-recourse. Examples of lenders are Market Invoice, Bibby, Lloyds etc. But for smaller businesses, the typical accounting treatment will involve: sales invoice is raised: debit trade debtor and credit sales as normal invoice finance received:… Continue reading Accounting for invoice finance
  • Loss relief
    Trading losses If your company makes a loss from its trading operations then it can claim relief against corporation tax. Current year If you make a trading loss, you can offset the loss against profits/gains from other trades or sources in your company in the current year. Carry back against previous year If you can’t… Continue reading Loss relief
  • Can tax deductions be claimed for bad debts?
    Bad debts can receive tax deductions if they are: bad debts that definitely cannot be recovered (eg debtor has already closed down) specific bad debts that are doubtful/unlikely to be received debts released by the creditor as part of a statutory insolvency arrangement Bad debts won’t receive tax deductions if they’re general provisions against overall… Continue reading Can tax deductions be claimed for bad debts?
  • Is entertaining tax deductible?
    Business entertainment means the provision of free or subsidised hospitality or entertainment. The person being entertained may be a customer, a potential customer or any other person. We’ve broken it down into 3 categories: 1) Clients and potential customers Client entertainment usually isn’t allowable for tax purposes. Examples may include: taking clients out for meals/drinks… Continue reading Is entertaining tax deductible?
  • Pension contributions tax savings
    Pension contributions can be a great way to save tax. Disclaimer Decisions about whether or not to make pension contributions should normally be led by investment considerations and our clients generally use financial advisers to decide whether or not to contribute as the money will usually be locked away and there can be various risks… Continue reading Pension contributions tax savings
  • Can VAT on entertaining be reclaimed?
    You cannot usually reclaim input VAT on business entertainment however you can sometimes reclaim it for staff entertainment. The notes below primarily come from VAT Notice 700/65 and VIT43200. 1) What is entertainment? Entertainment involves hospitality of any kind, such as: provision of food and drink provision of accommodation (such as in hotels) provision of… Continue reading Can VAT on entertaining be reclaimed?
  • Autumn Budget 2021 update
    We have analysed the Autumn Budget 2021 for the key changes relevant to small and medium businesses (SMEs). Please find below the key points which we feel may be of interest to our clients. 1) Payroll taxes / NIC From April 2022 there will be a new employment tax of 1.25% for the Health and… Continue reading Autumn Budget 2021 update
  • Tax efficient director salary and dividends 2022/23
    TLDR: From April 2022 onwards we would recommend a salary of £9,100 and dividends of £41,170. There will be £2,945 tax on total income of £50,270. Compared to 2021/22, the personal allowance threshold will not change and will stay at £12,570 per year and the higher rate tax will also still start at £50,270. From… Continue reading Tax efficient director salary and dividends 2022/23
  • Cap on R&D tax credits
    From 1 April 2020 the cash refund for payable R&D tax credits for small and medium size businesses (SMEs) will be limited based on the amount of payroll taxes paid by the company. SMEs can claim upto £20,000 plus 300% of its total PAYE and NIC liability for the period. However, a company is exempt… Continue reading Cap on R&D tax credits
  • Coronavirus: 2nd update on Government support
    We would like to let you know about the latest financial support available for businesses and individuals affected by the Coronavirus. Please do call or email us if you’d like to discuss anything further. JOB RETENTION SCHEME FOR 80% OF SALARIES This was first announced a while ago but the full details were only released… Continue reading Coronavirus: 2nd update on Government support
  • 2020 Spring Budget & Coronavirus update
    This is a longer budget update then usual and we’ve put some general notes about cashflow etc as several clients have asked us about this and the recent Government updates. Please also call/email if you’re unsure of anything or need some advice. Also please note that we’ve only tried to put the relevant budget changes… Continue reading 2020 Spring Budget & Coronavirus update
  • Startup accountant
    We are startup accountants & can help you setup Setting up a new startup or business can be stressful with what looks like a mountain of paperwork and red tape to deal with. We’re here to help you with the tax and accounting side of things and have advised startups as diverse as a new… Continue reading Startup accountant
  • Staff absence is expensive
    Staff absence Studies have shown that staff absences from sickness or holidays can be very expensive for businesses. The cost of annual leave Under UK laws, full time staff are entitled to annual leave of 28 working days. This is more than 1 month! If we take an example of an employee on £25,000 pa and… Continue reading Staff absence is expensive
  • How can SMEs prepare for the rise of the robots?
    The robot apocalypse Robot workers and AI… read the papers or turn on the news and its all doom and gloom for the masses. Perhaps one day a robot will be able to smile, converse, think and empathise in a way that makes it indistinguishable from a human. The robot apocalypse is coming, but rather… Continue reading How can SMEs prepare for the rise of the robots?
  • Tech startup outsourcing
    Tech startup outsourcing for operations/admin Tech startups will invariably have some processes which are not fully automated and require human input at some stage or another. This is where the operations/admin team comes in, especially for pre Series A startups where staff are multifunctional and systems are not yet fully developed. A few examples may… Continue reading Tech startup outsourcing
  • 2018 Autumn Budget Update
    As usual there are many changes to the 2018 Autumn Budget, however they’re not all relevant to our clients. So here we have set out the important changes that may affect our clients. The 2 main issues are IR35 changes for contractors and limits on R&D cash refunds. We’ve also added a reminder about the… Continue reading 2018 Autumn Budget Update
  • MiFID II and VAT on Research – still in the dark!
    31 October 2017 Although the MiFID II regulation has been published since 2014 (delayed implementation date – 3rd January  2018), it is surprising that H M Revenue & Customs has not yet provided any firm guidance on the VAT treatment of research work. Recent press states that HMRC is now meeting with industry groups and… Continue reading MiFID II and VAT on Research – still in the dark!
  • EMI Schemes (Enterprise Management Incentive)
    EMI schemes (Enterprise Management Incentives) are tax advantaged schemes offered by H M Revenue & Customs to small and medium sized businesses (“SME”) for incentivising the SME’s employees. EMI schemes are share option schemes which fundamentally provide tax savings for both the employee and the SME whilst also providing the facility for the SME to incentivise… Continue reading EMI Schemes (Enterprise Management Incentive)
  • Overseas Workday Relief – OWR
    Have you recently started to live and work in the UK but consider your “home” country to be elsewhere? If so, you are likely to be a UK resident but non-domiciled in the UK. If prior to becoming UK resident, you were also non-UK resident for a continuous period of 3 tax years, you are… Continue reading Overseas Workday Relief – OWR
  • Case studies with remote workers
    LeanStaff can save you £10-20k per employee by using the power of the internet to work remotely.  
  • Confirmation Statement
    How to complete the Confirmation Statement The Confirmation Statement is required to be filed at Companies House at least annually, normally on the anniversary of incorporation. However, we often have to bring it forward or file an extra one if there is investment or changes to shareholder/director details and this is required to be updated… Continue reading Confirmation Statement
  • Public sector contractors
    Public sector This post only applies to off payroll “contractors” (including locums or consultants etc) who are working in the public sector, such as for the NHS, a government agency, university or local authority and use a limited company to raise invoices. Contractors working in the private sector will not currently be affected by these… Continue reading Public sector contractors
  • New VAT flat rate scheme limited costs
    Old flat rate scheme Prior to 1 April 2017 the old flat rate scheme was very popular with many of our clients as they could earn an extra income under the scheme. Although they were not able to reclaim input VAT on expenses, they didn’t have to pass on the full 20% VAT charged to… Continue reading New VAT flat rate scheme limited costs
  • MAH win British Muslim Award for services to accounting
              MAH, Chartered Accountants are pleased to announce that they have won the prestigious British Muslim Award for services to accounting. The award was announced at a glamorous black tie ceremony held at the Athena in Leicester on 25 January 2017. Thousands of nominations were received from the public for The… Continue reading MAH win British Muslim Award for services to accounting
  • 6 ways to legally boost your balance sheet permanently
    We use our expertise to help clients maximise their assets where legally possible in accordance with UK GAAP or IFRS. This is especially useful for companies who need to meet gross asset or capital requirements such as FCA firms or raising bank loans or complying with bank or investor covenants. However, the methods below are… Continue reading 6 ways to legally boost your balance sheet permanently
  • Brecession Watch #1
    Could there be a recession? The Bank of England (“BoE”) has sought to calm financial markets and the UK economy by stating that there won’t be a financial crisis. They have also mentioned that UK banks are in much better health compared to the credit crisis of 2007-08 due to the new FCA/PRA regulations and… Continue reading Brecession Watch #1
  • BREXIT: A GUIDE FOR SMALL BUSINESSES
    DOWNLOAD THE FULL BREXIT REPORT HERE Background As readers are no doubt aware the UK voted to leave the EU in June 2016. We were shocked that Brexit actually happened and were worried about the impact on our clients. The long lasting effects are unknown and much will depend on the negotiation of trade agreements… Continue reading BREXIT: A GUIDE FOR SMALL BUSINESSES
  • New tax on dividends
    this post is now on our secondary website for contractors: http://vipcontractor.co.uk/new-tax-dividends/
  • Re-register as a plc
    How to Re-register as a plc A plc status can be beneficial for privately held companies as they will improve the credit status for a business and also makes it look more prestigious. A plc can be privately owned and doesn’t have to be listed on a stock exchange. If you currently have a limited… Continue reading Re-register as a plc
  • Setting up company structure
    Factors involved in setting up company structure There are different factors involved in setting up company structure and it depends on the type of business, circumstances of the shareholders and their aims for the business.   Shareholders: if you may sell the company and re-invest the profits a holding company may be useful otherwise, the co-founders can… Continue reading Setting up company structure
  • VAT for non-EU sellers
    Is registration required for VAT for non-EU sellers using Fulfilment by Amazon in the UK? This has been in the news recently and HMRC may have lost £2bn in recent times from non-EU sellers who have illegal evaded VAT and have recently announced methods of enforcing the VAT. This is a tricky subject and can get… Continue reading VAT for non-EU sellers
  • How does the flat rate VAT scheme work?
    If your business doesn’t have to pay much input VAT on its purchases, then it could make an extra profit using the flat rate VAT scheme. So even if it isn’t compelled to register as turnover is below £81,000 it could still be a good idea to register voluntarily. Please refer to the free pdf… Continue reading How does the flat rate VAT scheme work?
  • Diverted Profits Tax
    Draft legislation has just been released  for the diverted profits tax, which was recently announced in the Autumn Statement 2014 https://www.gov.uk/government/publications/finance-bill-2015-draft-legislation-overview-documents Effective date The new rules will be effective in respect of profits arising on or after 1 April 2015. 1st Rule The first rule is designed to address arrangements which avoid a UK permanent establishment… Continue reading Diverted Profits Tax
  • Is tax evasion haram?
    Download the full report here Tax evasion has a significant impact on the economy and has greatly contributed towards the £35bn UK tax gap between what should be collected in tax and what is actually paid for. As a result HMRC is stepping up its campaign against this criminal activity; prosecutions rose by 29 percent… Continue reading Is tax evasion haram?
  • Bitcoin audit
    Why would a Bitcoin audit be required? The New York State Department of Financial Services have proposed Bitlicense regulations which would require licensees to submit audited annual financial statements. If these regulations are passed it is possible that authorities in other jurisdictions would implement similar requirements. For example, we note that online gambling was initially illegal in… Continue reading Bitcoin audit
  • Xero Accountants
    We are certified as Xero Accountants As Xero accountants we specialise in tech startups but also have experience of many other types of businesses from creative agencies to contractors to restaurants. What is Xero? Xero makes it very easy for businesses to do their bookkeeping, for example by automatically feeding in transactions from your bank and using… Continue reading Xero Accountants
  • VAT and financial services
    VAT and financial services: Are you losing out on VAT? VAT and financial services is a very tricky area and this video presentation gives a brief overview: https://www.youtube.com/watch?v=IaYzGej4p0c The main points covered are: 1) VAT and financial services exemptions under VAT Act 1994 Schedule 9 Group 5 (eg money, loans, securities, advising collective investment scheme)… Continue reading VAT and financial services
  • FCA audit
    FCA audit: Do you need an FCA audit? Under the Companies Act 2006 (or as applied to LLPs) a business will normally need an audit if it is fairly large and exceeds 2 out of the 3 size limits of a small firm: assets > £3.26m (£5.1m from 1/1/16) turnover > £6.5m (£10.2m from 1/1/16) employees… Continue reading FCA audit
  • Pre trading expenses
    Pre trading expenses: summary You can get a tax deduction for pre trading expenses incurred upto 7 years before your business started trading. Pre-trading Under CTA2009 s.61, if a company incurs expenses for the purposes of a trade before (but not more than 7 years before) the date on which the company starts to carry… Continue reading Pre trading expenses
  • Startup equity, dilution and cap table
    Startup equity, dilution and cap table If you’re raising funding or startup equity you need to work out how many shares to issue to investors. The easiest way is probably to work out the % holdings after the share issue and work backwards. For example, if there are 2 co-founders with 100 shares each who… Continue reading Startup equity, dilution and cap table
  • VAT on Bitcoins
    see here for latest HMRC guidance on Bitcoins. http://www.hmrc.gov.uk/briefs/vat/brief0914.htm The post below was written before their guidance was published:     VAT on Bitcoins Download the full report here There has been a lot of uncertainty regarding the treatment of VAT on Bitcoins and other cryptographic currencies. This uncertainty has led to a VAT risk… Continue reading VAT on Bitcoins
  • Understanding business accounts
    Whether you are a new startup or a seasoned investor, understanding business accounts is crucial to staying on top of your business. The numbers don’t lie and will tell you if the business is profitable, if new strategies are working or if remedial action is required. They will also be able to tell you about the financial… Continue reading Understanding business accounts
  • Residential property tax planning
    Residential property can be a lucrative business, but profits or gains will be subject to tax. In this post we discuss some of the property tax planning options, including using limited companies or LLPs, trading vs investment property, capital gains tax and entrepreneurs relief. Please download the full report on residential property tax planning for full details. Trading stock vs Investment… Continue reading Residential property tax planning
  • Delay VAT liability
    It is sometimes possible delay VAT liabilities on invoices, and extra care should be taken with the timing of invoices close to the VAT quarter end. VAT Act 1994 The legislation states that VAT becomes due on the earlier of the following possible tax points: the services or goods have been supplied to the customer… Continue reading Delay VAT liability
  • Pursuit of profit in Bangladesh
    Entrepreneurs normally become wealthy by exploiting the capital and production of the labour force. Whilst that may be true in terms of financial wealth, I believe that having an extremely imbalanced economy in which an elite minority controls a poor majority will create a host of problems, leading to low qualities of life for entrepreneurs despite their… Continue reading Pursuit of profit in Bangladesh
  • IR35
    What is IR35 IR35 ensures that contractors who are effectively “shadow employees” pay tax like normal employees. There is legislation for substance over legal form of a relationship between a contractor (or freelancer or locum) and client. Some contractors use limited companies to invoice “clients”, but the overall facts suggest they are actually employees and are “inside of IR35”. The… Continue reading IR35
  • Using a holding company
    Holding company Many businesses will structure their affairs by using a group of companies. There will be a parent or holding company at the top, and this will hold 1 or more trading subsidiaries. Advantages of using a holding company There is no tax on dividends from subsidiaries to the holding company, so you could… Continue reading Using a holding company
  • Use deferred income to save tax
    Use deferred income to save tax Sales invoices need to be recognised in the correct accounting period. An invoice can sometimes be deferred when preparing the annual accounts, thereby deferring corporation tax for another year also. If an invoice has been raised prior to the year end it is imperative to analyse any supporting contract or sales… Continue reading Use deferred income to save tax
  • Sole trader vs limited company tax
    New and old businesses should all consider the pros and cons of sole trader vs limited company tax: http://www.youtube.com/watch?v=uByIoxZ6598&feature=youtu.be Sole trader When starting a business, being a sole trader  is the easiest way to do business as this involves much less administration than a limited company. Its easy to register with HMRC at https://online.hmrc.gov.uk/registration/newbusiness The… Continue reading Sole trader vs limited company tax
  • Capital reductions to pay out dividends
    Sometimes a company has cash but no distributable reserves, so it can’t pay dividends. Capital reductions can be used in certain circumstances to create distributable reserves which can then be paid in dividends. For example, a company may have issued shares at a premium but initially made losses. Once it becomes profitable and cash generative it may… Continue reading Capital reductions to pay out dividends